Iran Government Expected to Change Currency Repatriation Rules

EghtesadOnline: Iran's private sector remains steadfast in its opposition to recent currency repatriation rules lately adopted by the government with the supposed aim of bolstering currency reserves and fostering trade.

News ID: ۷۸۴۲۳۰

21 October 2018

"The emphasis of the central bank to implement the currency repatriation bylaw will lead to professional exporters being kicked out of the field," the president of Iran Chamber of Commerce, Industries, Mines and Agriculture said on Thursday.

"With every talk about currency repatriation, exporters are accused that they don't bring their currency yields into the country, but these yields have already been returned in recent years because where would exporters provide their capital for next shipments if they don't repatriate their currency?" Gholamhossein Shafei was also quoted as saying by IRNA in a session of Private Sector-Government Dialogue Council held in Khorasan Razavi Province.

When the government attempted to fix the rate of the rial in April to combat an expanding currency crisis, it also mandated all exporters to repatriate their foreign currency yields into the economic cycle of the country, according to Financial Tribune.

The move was aimed at boosting strained currency reserves, at least in the short term, under increasingly harsh conditions. But it understandably received negative feedback from private sector players.

Government regulations obligate exporters to return 95% of their currency yields by accepting imported goods, reimbursing currency debts, selling foreign currencies to banks and exchanges, or making deposits in banks within three months of receiving their customs export permit.

The repatriation period was initially set at six months, but was later reduced.

The government has said any exporter, who receives their foreign currency yields and does not repatriate them, will have their official trade IDs nullified by the chambers of commerce.

"This has created many problems. For example, 500 to 600 renowned companies have their goods on the way or in customs awaiting clearance, meaning that they have no specific issues, but the new bylaw will have their trade IDs suspended," the ICCIMA chief said.

According to Shafei, the government has listened to private sector complaints and will make changes to the currency repatriation bylaw by Monday.